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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5204 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  2d Session
                                S. 5204

To amend the Internal Revenue Code of 1986 to increase the limitations 
for deductible new business expenditures, to consolidate provisions for 
   start-up and organizational expenditures, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           September 25, 2024

   Ms. Rosen (for herself, Mrs. Shaheen, Ms. Baldwin, Mr. Wyden, Mr. 
 Blumenthal, Ms. Klobuchar, Mr. Heinrich, Mr. Coons, and Mr. Warnock) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL

 
To amend the Internal Revenue Code of 1986 to increase the limitations 
for deductible new business expenditures, to consolidate provisions for 
   start-up and organizational expenditures, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tax Relief for New Businesses Act''.

SEC. 2. NEW BUSINESS EXPENDITURES.

    (a) Consolidation of Deduction for Start-Up and Organizational 
Expenditures.--
            (1) In general.--Section 195(a) of the Internal Revenue 
        Code of 1986 is amended by inserting ``or organizational'' 
        after ``start-up''.
            (2) Organizational expenditures.--Subsection (c) of section 
        195 of the Internal Revenue Code of 1986 is amended by adding 
        at the end the following new paragraph:
            ``(3) Organizational expenditures.--The term 
        `organizational expenditures' means any expenditure which--
                    ``(A) is incident to the creation of a corporation 
                or a partnership,
                    ``(B) is chargeable to capital account, and
                    ``(C) is of a character which, if expended incident 
                to the creation of a corporation or a partnership 
                having a limited life, would be amortizable over such 
                life.''.
            (3) Conforming amendments.--
                    (A) Section 195(b)(1) is amended--
                            (i) by striking ``with respect to any 
                        start-up expenses'' and inserting ``with 
                        respect to any active trade or business'',
                            (ii) by striking ``the amount of start-up 
                        expenditures with respect to'' in subparagraph 
                        (A)(i) thereof and inserting ``the aggregate 
                        amount of start-up and organizational 
                        expenditures paid in connection with'', and
                            (iii) by adding at the end the following 
                        flush sentence:
        ``In the case of a partnership or S corporation, the election 
        under the preceding sentence shall be made at the entity 
        level.''.
                    (B) Section 195(b)(2) of such Code is amended--
                            (i) by striking ``amortization period.--In 
                        any case'' and inserting the following: 
                        ``amortization period.--
                    ``(A) In general.--In any case'', and
                            (ii) by adding at the end the following new 
                        subparagraph:
                    ``(B) Special partnership rule.--In the case of a 
                partnership or S corporation, subparagraph (A) shall be 
                applied at the entity level.''.
                    (C) Section 195(b) of such Code is amended by 
                striking paragraph (3).
                    (D)(i) Part VIII of subchapter B of chapter 1 of 
                such Code is amended by striking section 248 (and by 
                striking the item relating to such section in the table 
                of sections for such part).
                    (ii) Section 170(b)(2)(C)(ii) of such Code is 
                amended by striking ``(except section 248)''.
                    (iii) Section 312(n)(3) of such Code is amended by 
                striking ``Sections 173 and 248'' and inserting 
                ``Section 173''.
                    (iv) Section 535(b)(3) of such Code is amended by 
                striking ``(except section 248)''.
                    (v) Paragraphs (3) and (4) of section 545(b) of 
                such Code are each amended by striking ``(except 
                section 248)''.
                    (vi) Section 834(c)(7) of such Code is amended by 
                striking ``(except section 248)''.
                    (vii) Section 852(b)(2)(C) of such Code is amended 
                by striking ``(except section 248)''.
                    (viii) Section 857(b)(2)(A) of such Code is amended 
                by striking ``(except section 248)''.
                    (ix) Section 1363(b) of such Code is amended by 
                inserting ``and'' at the end of paragraph (2), by 
                striking paragraph (3), and by redesignating paragraph 
                (4) as paragraph (3).
                    (x) Section 1375(b)(1)(B)(i) of such Code is 
                amended by striking ``(other than the deduction allowed 
                by section 248, relating to organization 
                expenditures)''.
                    (E)(i) Section 709 of such Code is amended to read 
                as follows:

``SEC. 709. TREATMENT OF SYNDICATION FEES.

    ``No deduction shall be allowed under this chapter to a partnership 
or to any partner of the partnership for any amounts paid or incurred 
to promote the sale of (or to sell) an interest in the partnership.''.
                    (ii) The item relating to section 709 in the table 
                of sections for part I of subchapter K of chapter 1 of 
                such Code is amended to read as follows:

``Sec. 709. Treatment of syndication fees.''.
                    (F) The heading of section 195 of such Code (and 
                the item relating to such section in the table of 
                sections for part VI of subchapter B of chapter 1 of 
                such Code) are each amended by inserting ``and 
                organizational'' after ``Start-up''.
    (b) Increase in Limitation.--Clause (ii) of section 195(b)(1)(A) of 
the Internal Revenue Code of 1986 is amended--
            (1) by striking ``$5,000'' and inserting ``$50,000'', and
            (2) by striking ``$50,000'' and inserting ``$150,000''.
    (c) Application of Net Operating Loss Rules.--Section 172 of the 
Internal Revenue Code of 1986 is amended by redesignating subsection 
(g) as subsection (h) and by inserting after subsection (f) the 
following new subsection:
    ``(g) Special Rules for Start-Up and Organizational Expenditures.--
            ``(1) In general.--In the case of a taxpayer making an 
        election under this subsection--
                    ``(A) this section shall be applied separately to 
                start-up and organizational net operating losses and 
                other net operating losses,
                    ``(B) in applying this section to start-up and 
                organizational net operating losses--
                            ``(i) subsection (a)(2)(B) shall be applied 
                        by substituting `100 percent' for `80 percent' 
                        in clause (i) thereof, and
                            ``(ii) subsection (b)(2)(C) shall not 
                        apply, and
                    ``(C) in applying this section to other net 
                operating losses, for purposes of subsections 
                (a)(2)(B)(ii)(I) and (b)(2), taxable income shall be 
                reduced by the amount of the deduction allowed under 
                this section with respect to start-up and 
                organizational net operating losses.
            ``(2) Start-up and organizational net operating loss.--For 
        purposes of this section, the term `start-up and organizational 
        net operating loss' means the amount which would be a net 
        operating loss if the only deduction taken into account were 
        the deduction allowed under section 195.
            ``(3) Other net operating losses.--For purposes of this 
        section, the term `other net operating loss' means the net 
        operating loss determined without regard to the deduction 
        allowed under section 195.
            ``(4) Election.--An election under this section shall be 
        made at such time and in such form and manner as the Secretary 
        shall prescribe. Such an election, once made, shall be 
        irrevocable.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to expenses paid or incurred in taxable years beginning after 
December 31, 2024.
                                 <all>
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